ECB's Lagarde Tariffs will be negative for global growth in the long-term
European Central Bank (ECB) President Christine Lagarde said on Thursday that a trade war at large would be a "net negative for all" and not just for the targets of US tariffs, per Reuters.
Key quotes
Trump has indicated a range of tariffs around 10-20% for the rest of the world.
The fact that you put out a range means that you are open to discussion.
Europe is erring towards a "cheque book strategy”.
We could offer to buy certain things from the US and signal that we are prepared to discuss to see how we can reach a compromise.
This is a better scenario than a pure retaliation strategy where there is no real winner.
An all-out trade war would cause a negative drag on global GDP
The actual net impact on inflation is still uncertain at this stage. It is "extremely difficult" to assess the outlook as you may have a combination of a decline in GDP and potential depreciation or appreciation of the dollar.
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